If I have put up a bounty but don't award it then it goes to answer with most votes received (& >=2): If two answers have equal votes does it get split? Also, it is possible to allocate bounty, or is it an all or nothing award?
The bounty system FAQ should answer most questions about the bounty system.
For your specific questions:
If I put up a bounty but don't award it, then it goes to the answer with the most votes received (as long as they have at least two votes). If two answers have an equal number of votes, does it get split?
If two or more eligible answers have the same score, the oldest answer is awarded the bounty.
Is it possible to allocate a bounty, or is it an all-or-nothing award?
It is not possible to split a bounty. If multiple answers to a single question have earned bounties, it's because the question has been subject to multiple bounties.